Posts filed under Affordability

Like so many across the country, the residents of Red Springs, North Carolina are concerned about rising electricity prices. Since 2001, real energy costs for middle- and low-income families have increased by a staggering 27 percent. Higher energy prices affect all of us, but have a particularly devastating impact on low- and fixed-income families.

Seniors and low-income folks on fixed incomes will be hit disproportionately hard by rising electricity costs. […]Households in the bottom 10 percent of the income distribution will pay roughly three times what the richest 10 percent pay as a percentage of their income. For all of the president’s talk of income inequality, his carbon plan will only exacerbate the problem.

“These regulations single out those who deserve our compassion and our aid and place the greatest cost on their shoulders,” civil rights leader Dr. Charles Steele recently said. Keeping energy prices affordable is critical for so many Americans. Coal can continue to provide the reliable, low-cost electricity our country needs, but must remain an integral part of our energy portfolio.

In June, the Obama Administration and the Environmental Protection Agency (EPA) announced it’s proposed stringent carbon regulations on existing power plants — a clear attempt to eliminate coal-based power. Next week, EPA will kick off four separate two-day hearings in Atlanta, GA; Denver, CO; Pittsburgh, PA; and Washington, D.C. Here at America’s Power, we’re kicking off a three-part series highlighting the critical role affordable, reliable coal-based electricity plays in all of the places EPA will visit. And, we’re starting with Colorado which depends on coal-based power for local economic development, fuel diversity and low-cost power statewide.

As a top ten coal-producing state, Colorado’s energy reliability and economic vitality are threatened by EPA’s proposed rule. More than 2,500 workers staff Colorado’s 14 coal mines, and thousands of workers’ jobs are indirectly tied to mining and power generation. On top of that, coal is Colorado’s primary power source and is necessary to keep electricity rates affordable so it can continue to fuel economic progress.

In 2013, 64 percent of Colorado’s electricity was generated by coal. Because coal makes up a majority of the state’s energy portfolio, Colorado has been able to keep electricity prices under 10 cents per kilowatt hour, which is below the national average for power prices. These affordable rates allow businesses to employ more Coloradoans, which in turn enables these employees to have an increased opportunity for income mobility.

Despite the economic opportunities affordable energy creates for the Centennial State, a tremendous number of citizens still struggle to pay their energy costs. Currently, almost 880,000 low- and middle-income Colorado residents allocate 17 percent of their after-tax income to power bills. With so many citizens already struggling, Colorado cannot allow these costs to increase. If the Obama Administration and EPA have their way with these regulations, skyrocketing power bills will be the unfortunate future that Colorado, and the rest of our nation, faces.

Colorado is a fantastic example of how an “all of the above” energy policy can work if the federal government stays out of state-level energy decisions. The state relies on a diverse portfolio of sources and fully embraces the abundant natural resources at Colorado’s disposal including coal which is a vital element of the fuel mix. That’s why so many affected parties will be testifying in front of EPA next week telling the agency that its carbon regulations for existing power plants won’t work for Colorado.

Rather than making everything from power bills to grocery bills more expensive, we should support innovation and prioritize maintaining a reliable and low-cost electricity portfolio. With so many citizens depending on the jobs and affordable energy coal provides, this fuel source is something the Centennial State cannot afford to lose. We’re looking forward to the hearing and hope EPA pays close attention to the important criticisms shared with regards to their overreaching carbon regulations.

I am back again, energy enthusiasts, and as promised have brought more information. I took a look last week at international reactions to EPA’s new carbon regulations, with a specific focus on Canada and Australia. This week my fellow intern, Joe Singh, and I analyze another area of the globe. Joe has a background in economic policy analysis and is helping ACCCE research the global coal market. As I mentioned last week, EPA’s costly new plan would have virtually no effect on climate change, with less than 1 percent in carbon reductions. The Obama Administration understands this, but believes that if they lead by example carbon-emitting nations like China and India will follow. In his research, Joe points out that assuming these nations will follow our lead is contrary to the growing coal consumption in both these nations.

China, the world’s largest coal consumer with one of the fastest growing economies, has said it will set emission limits. Make no mistake, however, China is not exactly following the administration’s approach. The EPA set state by state targets that would reduce carbon dioxide (CO2) emissions from the electric sector by 30 percent by 2030. China, on the other hand, has instead adopted an emissions intensity target. This emissions intensity target would limit the amount of CO2 emitted for every dollar of economic activity in China, on average. The reason for using emissions intensity rather than absolute emissions is to allow economic growth, which China wishes to maintain. In Joe’s research, he cites an Australian National University report which found that if China maintains its economic growth, even with a significant emissions intensity target in place, CO2 emissions will still grow. Put simply, even if China can meet the targets it sets, its continued economic growth will still result in increased CO2 emissions – not less.

The results of future international negotiations on climate change are uncertain. One can look to the past, however, to provide clues for potential future actions. In two recent international climate negotiations, agreements could not be reached because of defiance conflict between the developing and developed world. The United States did not ratify the Kyoto Protocol, because it exempted developing nations, like China, from reducing their emissions. Chinese officials claimed that it was “unfair to expect impoverished people in…developing countries to cut back on energy consumption, which is not even sufficient to meet their basic living conditions.” China’s resistance to a binding agreement arose again during the Copenhagen conference, which occurred during Obama’s first term in 2009. In a study available on EPA’s website, Western officials blamed the failure of this conference on China’s opposition to binding global emissions reductions. This opposition was traced once again to China’s view that emissions reductions are robbing developing nations of their right to industrialize. Considering this climate impasse happened only five years ago, it’s unclear if Chinese willingness to reach a binding agreement has changed. All of this makes me wonder whether the administration’s plan to reduce CO2 emissions will be enough to overcome a history of failed climate negotiations with China.

Lately, we’ve been taking a hard look at some claims made in the roll-out of the Environmental Protection Agency’s carbon regulation for existing power plants. An Opinion Editorial I penned was featured in The Hill today, refuting six unsubstantiated claims and questionable facts. We’ve seen the misleading claims and want to make sure the reality of America’s energy situation doesn’t fall to the wayside. A recent Wall Street Journal article, “What’s the Real Cost of the EPA’s Emissions Cap?” demonstrates the faulty logic and fuzzy math employed by the Environmental Protection Agency (EPA) in setting standards for its greenhouse gas rule.

EPA based its calculations on one fundamentally erroneous assumption: that Americans will use less energy in the future. Conventional wisdom, not to mention the government’s own data, however, tells a very different story. As the piece says, the federal Energy Information Administration (EIA) recently forecast that electricity demand will, in fact, grow 0.9% every year until 2040.

But even if EIA’s data isn’t convincing on its own, conventional wisdom reaffirms that EPA’s postulation falls flat on its face. Simply put, the world in which we live demands more energy. Every day, Americans are using more mobile devices; more electric cars are driving on U.S. roads; and our population continues to rise. And it is low-cost, reliable baseload power from coal that supports economic and societal growth.

EPA is hedging its bets on largely unproven energy efficiency programs that pose enormous cost and implementation challenges. States that have experimented with such measures have yielded, on the whole, less-than-stellar results. The agency’s proposal sets pie-in-the-sky expectations for these programs that, in turn, inflate calculations across the board and set the stage for wholly unrealistic and unachievable standards.

While EPA’s rule clearly misses the mark on many counts, I fear that troubling revelations such as EPA’s calculating method will be unearthed as we more fully probe the measure. EPA needs to get back to reality, readjust its standards using more grounded data and stop misleading the American people about the true costs of its rule.

This week, the Wall Street Journal hosted its ECO:nomics business forum in sunny Santa Barbara, California. Several CEOs and business leaders gathered together to discuss America’s energy and environmental future. How do we meet our ever-growing electricity needs, while also reducing emissions? Many leaders agreed: coal is here to stay, and we must utilize clean coal technology.

Nick Akins, CEO of American Electric Power, reiterated the importance of coal-fueled power to support our electrical grid. Utilities like AEP depend on coal, a reality that was evident during the recent ‘polar vortexes’ and throughout the frigid winter. Around 90% of AEP’s coal plants currently slated for closure was brought online to help meet demand and power through the coldest days. As Akins told ECO:nomics attendees, we need coal backing up our electricity grid because “no one likes the lights to go out.”

Akins was followed by Peabody Energy Corp. CEO Gregory Boyce. Boyce and Akins carried a similar message: coal is critical and will be an integral part of our energy mix for years to come. It is the largest source of electricity generation in the U.S. and the fastest-growing source around the world. Boyce noted that Germany, Italy, Spain and the UK are all increasing their imports of coal, and Asia has been steadily increasing its use of coal, as well.

Coal-fueled power is electrifying communities across the globe and can bring power to all those who need it most, Boyce explained. Given Boyce’s commentary at the conference, it’s not surprising that Peabody is leading a global effort to help promote coal’s role in eradicating poverty through its newly launched Advanced Energy for Life campaign.

Both Boyce and Akins stressed the importance of further developing clean coal technology. In the words of Nick Akins, “progress is being made but not enough.” Boyce pointed out that building new clean coal plants is an opportunity to decarbonize. They both agreed that coal must be a major part of our future energy portfolio to ensure reliability, while also limiting emissions with advanced technology. But, if EPA continues with its crusade against coal-based electricity, the future of clean coal technology will be effectively quashed.

Instead we should support advanced technologies and maintain low-cost, reliable power for our communities through the use of America’s most abundant source of energy – coal.

This week, we released a detailed economic analysis of the Natural Resource Defense Council’s (NRDC) carbon regulation proposal, first put forth by NRDC in December 2012 and updated last week.

The newest version of NRDC’s proposal ludicrously asserts that its plan to reduce CO2 emissions from existing power plants would carry no costs at all and would actually spur numerous benefits. Worse yet, the NRDC proposal recommends a system-based approach (also known as “outside-the-fence”) that is essentially a cap-and-trade program. Our analysis, performed by leading research firm the National Economic Research Associates (NERA), clearly demonstrates that NRDC left out some critical facts including the $13 to $17 billion-per-year price tag for consumers and the millions of jobs America stands to lose under its proposed policy.

Our economic analysis further projects the NRDC proposal would cost consumers a total of $116 to $151 billion during the period of 2018-2033. And, retail electricity prices would increase by double digit percentages in as many as 29 states.

Over this same time period, net job losses could total as many as 2.85 million. NRDC projects net job gains in the thousands, but only in the years 2016 and 2020.

NRDC also asserts that gas-fired generation would increase by 2 percent. Our economic analysis found that natural gas-fired generation would increase by 8-16 percent to keep up with demand, while rates would simultaneously increase by as much as 16 percent.

The results of our economic analysis reveal that the NRDC proposal is, in fact, all pain with very little gain. And the proposal’s failure to mention the many potential consequences, like cost increases and job losses, suggests that the group is ignoring reality in order to drum up support for its impractical plan. A more reasonable approach to greenhouse gas regulations would offer more flexibility and would focus on measures that can be taken at power plants to reduce their impact, while maintaining dependable, low-cost, coal-based electricity.

Here at America’s Power, we support an “inside-the-fence,” source-based approach that bases emissions reductions on measures taken at existing power plants. This would include many improvements power plants can make to their facilities that improve efficiency, remove emissions and more. Being able to implement measures at individual generating units is a common sense approach to working with utilities and achieving significant emissions reductions and environmental improvements. Let’s work together to craft a solution that works for our consumers and for America’s energy future.

Join us in asking the EPA to set common sense policies and to protect American jobs today.

A recent report concluded what many American families already understand all too well – energy costs in the U.S. are on the rise. Since 2011, real energy costs for middle- and low-income families have increased by an astounding 27 percent. These costs are rising quickly, while real incomes have declined.

We rolled out a new hub on our website last week that features interesting facts that puts rising energy costs into terms to which we can all relate.

For example, the average American family will spend $479.33 per month on energy costs in 2014. That’s enough to buy 61 rotisserie chickens or 121 gallons of milk. Aside from necessities like food and housing, this year’s average energy cost total is enough to cover the cost of a kitchen remodel, or tablets for an entire elementary school class.

These figures highlight how energy is competing with other basic needs like housing, food and healthcare within families’ budgets. Sadly, as energy costs are projected to increase, families will see little relief in the near future.

The problem of high energy costs will only be exacerbated by the Environmental Protection Agency (EPA) as it sets overreaching carbon emissions regulations for power plants. EPA’s New Source Performance Standards (NSPS) for coal-fueled power plants promises to increase energy costs by placing a de facto ban on the construction of any new coal plants. By eliminating an affordable resource that offers reliable, baseload power to the electricity grid and that supports thousands of jobs across the country, EPA is setting our communities up for higher energy prices with no relief in sight.

By limiting our nation’s energy costs through the use of a diverse, affordable energy mix, we can lighten the burden on our hard-working families.

Check out the new site to learn more and see how you can take action to protect affordable power derived from coal.

If you read the Wall Street Journal yesterday, you probably noticed a full-page ad featuring EPA Administrator Gina McCarthy telling Americans to “suck it up” over skyrocketing electricity bills. While we agree, skyrocketing bills are coming your way, that ad didn’t come from us. It came from a group called Environmental Policy Alliance who launched a new site epafacts.com yesterday to call attention to little issues at EPA like transparency and secret science, as well as what the true cost Americans will bear as a result of its overreaching regulations.

The Environmental Policy Alliance is not alone in wanting to know more about what goes on behind the closed doors at EPA. In fact, the House Committee on Energy and Commerce’s Subcommittee on Oversight and Investigations has weighed-in on the matter and is opening a full investigation on the EPA decision-making process relating to the agency’s consideration of carbon capture and storage (CCS) technologies as it relates to creating greenhouse gas emission standards for new power plants. The letter to Administrator McCarthy specifically mentions how section 111 of the Clean Air Act authorizes the EPA to impose emission standards using carbon capture technologies that have been “adequately demonstrated” which does not legally include those that are federally funded. A plant that we are quite familiar with, the Kemper County facility in Mississippi, is federally funded, has the CCS technology and is a great starting point but is not ready to be duplicated for many reasons.

The House Energy investigation as well as the site epafacts.com confirms what we already know: EPA’s regulations are far too stringent and will be destructive to our way of life. By continuing on their rampage of taking coal out of the mix, energy costs for families will continue to rise, forcing some to make the unbearable choice to keep the lights on or put food on the table. In addition, coal-fired plants around the country are facing retirements that will result in jobs lost and an unreliable grid that can’t deliver power when it’s needed most. Thankfully, our legislators are starting to listen, and hopefully will put a stop to EPA’s overzealous regulations which ultimately will inflict much pain without any real gain. If you haven’t already, visit eparegscostjobs.com and send a comment to McCarthy’s EPA and stand up for affordable, reliable power and American jobs.

Mike Duncan is the president and CEO for the American Coalition for Clean Coal Electricity, a national, nonprofit organization dedicated to supporting and promoting the use of coal...
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Laura SheehanSenior Vice President
Communications

Laura Sheehan is a seasoned public affairs expert with more than a 20-year track record in policy communications, media relations, crisis and issues management, community and...
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Julia TreanorSenior Director
Communications

Julia Treanor is a strategic communications and public affairs professional with nearly 10 years of experience in digital strategy, issue advocacy, political communications, media ...
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China RiddleCommunications Coordinator
Communications

China Riddle is a Communications Coordinator at ACCCE. Growing up in the heart of coal country, China understands the important role coal-based power plays in America’s energy and economic future.Read Full Biography +

Jade DavisSenior Director
State Affairs and Outreach

Jade Davis is the Senior Director of State Affairs and Outreach at ACCCE. In his current role, Jade works with ACCCE’s regional and communications staff and government affairs staff ...
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The American Coalition for Clean Coal Electricity (ACCCE) is committed to the idea that America can have the affordable, reliable electricity we need, with the clean environment we want. ACCCE’s Behind the Plug blog is the place for up-to-date news and analysis on clean coal technology developments and energy policy progress.
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